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Archived Verification PrioritiesJuly 2019

Tariff Classification

Fresh Cut Flowers

The risk identified is that fresh cut flowers may be misclassified as "other" fresh cut flowers, which attract a duty rate of 6%.

Flowers named in the Customs Tariff should be classified under their respective tariff items, which attract duty rates from 8% to 16%.

This verification priority was released in April 2012 and is now complete.

Targeted Companies

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

32

32

23

72%

$13,294

$112,971

$66,000

$192,265

The results show that many flowers specifically named in the Customs Tariff were misclassified as other fresh cut flowers.

A verification priority regarding the valuation of fresh cut flowers is also complete.

Palm Oil

The risk identified is that crude palm oil of tariff item 1511.10.00 and other palm oils of tariff item 1511.90.90, which are dutiable, could be misclassified under other tariff items that are duty-free.

This verification priority was released in May 2013 and is now complete.

A second round of verifications was released in November 2014 and is also complete.

Targeted Companies (Round 1-2)

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

17

17

10

59%

$304,568

$4,993,059

$600

$5,298,277

The results show that most of the goods that were found to be misclassified were properly re-classified under subheading 1517.90 or under tariff item 1511.90.90 of the Customs Tariff.

Wheel Rims and Spokes

The risk identified is a potential misclassification of goods under tariff item 8714.92.00, which is duty-free and applies only to wheel rims and spokes for vehicles of Headings 87.11 to 87.13 (e.g., motorcycles, bicycles, and carriages for disabled persons). It was suspected that some goods should have been classified under tariff item 8708.70.19 as road wheels of motor vehicles of Headings 87.01 to 87.05, which attracts a duty rate of 6%.

This verification priority was released in February 2012 and is now complete.

A second round of verifications was released in August 2013 and is also complete.

Targeted Companies (Round 1-2)

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

21

21

20

95%

$25,076

$82,638

$73,200

$180,914

The results of both rounds of verifications confirmed that the majority of the goods that were verified were in fact for use on motor vehicles.

Apparel Samples

The risk identified is that apparel classified under conditional relief tariff item 9936.00.00, which is duty-free, may not comply with the usage conditions set out in this tariff item. Duty rates for apparel range as high as 18%.

This verification priority was released in March 2014 and is now complete.

Targeted Companies

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

9

9

8

89%

$13,111

$5,334

$1,350

$19,795

The results show that some of the goods that were verified did not qualify for the use of conditional relief tariff item 9936.00.00 of the Customs Tariff.

Bags of Polymers of Ethylene

The risk identified is that bags of polymers of ethylene may be misclassified under tariff items that attract a duty rate of 6.5% under the Most-Favoured-Nation (MFN) tariff or 3% under the General Preferential Tariff (GPT), but should instead be classified under Headings 42.02, 46.02 and 63.05, which attract duty rates as high as 18% under the MFN or 7% under the GPT.

This verification priority was released in March 2014 and is now complete.

Targeted Companies

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

18

18

4

22%

$1,291

$46,321

$0

$47,612

The results show that most of the goods that were found to be misclassified were properly re-classified under Heading 42.02 of the Customs Tariff.

Generating Sets

The risk identified is that generating sets could be incorrectly classified within Heading 85.02, instead of being properly classified elsewhere within the same position, and potentially be subject to a duty rate of 2%.

This verification priority was released in August 2014 and is now complete.

Targeted Companies

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

24

24

20

83%

$89,171

$2,053

$2,100

$93,294

The results show that the goods that were found to be misclassified were properly re-classified under various tariff items of Chapters 84 and 85 of the Customs Tariff.

Coconut Milk from Asian Countries

The risk identified is that full cream or whole milk powder, properly classified as dairy products under Heading 04.02, may be misclassified as coconut powder or milk under various tariff items. Many tariff items of Heading 04.02 contain "over access commitment" duty rates as high as 295.5%.

This verification priority was released in May 2012 and is now complete.

A second round of verifications was released in July 2013 and is also complete.

Targeted Companies (Round 1-2)

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

42

42

21

50%

$55,736

$192,399

$5,850

$253,985

The results of both rounds show that the goods that were found to be misclassified were properly re-classified under Chapters 4, 11, 12, 19, 20, 21 and 22 of the Customs Tariff.

Gazebos

The risk identified is that gazebos could be misclassified as pre-fabricated buildings, which attracts a duty rate of 6% under the Most-Favoured-Nation Tariff (MFN) and is duty-free under the General Preferential Tariff (GPT). The goods may be properly classified as structures of aluminum under tariff item 7610.90.90, which attracts a duty rate of 6.5% (MFN) and 5% (GPT).

This verification priority was released in November 2013 and is now complete.

A second round of verifications was released in August 2014 and is also complete.

Targeted Companies (Round 1-2)

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

33

33

19

58%

$97,940

$631,043

$300

$729,283

The verifications confirmed the suspected misclassification.

Machinery for Public Works

The risk identified is that machinery could be misclassified as machinery for public works, building or the like, which is duty-free, instead of being properly classified under tariff item 8705.90.10, which focuses primarily on special purpose motor vehicles and attracts a duty rate of 6.1%.

This verification priority was released in March 2014 and is now complete.

Targeted Companies

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

10

10

2

20%

$0

$0

$0

$0

The results show that the majority of the goods verified were properly classified as machinery for public works.

Polyurethanes in Primary Forms

The risk identified is that goods could be incorrectly classified under subheading 3909.50 (i.e. polyurethanes in primary forms), which is duty-free, whereas the goods may not be in a primary form and therefore should instead be classified in tariff items that are subject to a duty rate of 6.5%.

This verification priority was released in July 2014 and is now complete.

Targeted Companies

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

21

21

8

38%

$39,709

$101,153

$150

$141,012

The results show that the goods that were found to be misclassified were properly re-classified under various tariff items of Chapters 32, 35 and 38 of the Customs Tariff.

Articles of Iron or Steel

The risk identified is that articles of iron or steel could be incorrectly classified within Heading 73.26, instead of being properly classified elsewhere within the same Heading, and potentially be subject to a duty rate of 6.5%.

This verification priority was released in May 2015 and is now complete.

Targeted Companies

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

14

14

10

71%

$6,061

$20,507

$9,900

$36,468

The results show that most of the goods that were found to be misclassified were properly re-classified elsewhere within Chapter 73 of the Customs Tariff.

Spectacle Lenses

The risk identified is that spectacle lenses may be misclassified within Heading 90.01, which is duty-free for certain goods, and may be properly classified under other tariff items within the same heading as "other" products, which attract a duty rate of 2%.

This verification priority was released in January 2013 and is now complete.

A second round of verifications was released in November 2014 and is also complete.

Targeted Companies (Round 1-2)

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

29

29

23

79%

$192,885

$710,154

$10,200

$913,239

The results of both rounds of verifications show that most of the goods that were found to be misclassified were properly re-classified under tariff item 9001.50.90 of the Customs Tariff.

Cereals

The risk identified is that cereals could be incorrectly classified under Heading 10.08, whereas the accurate tariff items could potentially be subject to various duty rates depending on the appropriate classification that may be determined.

This verification priority was released in December 2014 and is now complete.

Targeted Companies

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

7

7

7

100%

$17,247

$12,631

$150

$30,028

The results show that the goods that were found to be misclassified were properly re-classified under various tariff items within Chapters 10, 11, 12 and 19 of the Customs Tariff.

Special Purpose Motor Vehicles

The risk identified is that special purpose motor vehicles could be misclassified under duty-free tariff items instead of being properly classified under various tariff items of Heading 87.05, which attract a duty rate between 6.1% and 6.7%.

This verification priority was released in July 2014 and is now complete.

A second round of verifications was released in August 2016 and is also complete.

Targeted Companies (Round 1-2)

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

62

62

32

52%

$229,842

$78,757

$3,000

$311,599

The results of the two rounds show that most of the goods that were found to be misclassified were properly re-classified under various dutiable tariff items of Heading 87.05 of the Customs Tariff.

Geophysical and Oceanographic Instruments

The risk identified is that various instruments could be incorrectly classified within Heading 90.15, whereas the accurate tariff items could potentially fall outside of Heading 90.15 and/or be subject to various duty rates depending on the appropriate classification that may be determined.

This verification priority was released in November 2014 and is now complete.

Targeted Companies

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

24

24

19

79%

$55,035

$276,863

$3,000

$334,898

The results show that the goods that were found to be misclassified were properly re-classified under various tariff items within Chapters 84, 85 and 90 of the Customs Tariff.

Prepared Meat of Swine

The risk identified is that imported goods could be incorrectly classified as prepared meat of swine within Heading 16.02, instead of being properly classified elsewhere within the same Chapter. The duty rates for some tariff items within Chapter 16 range from 0% to 12.5%, while others are tariff rate quota (TRQ) tariff items, which are subject to duty rates as high as 253%.

This verification priority was released in March 2016 and is now complete.

Targeted Companies

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

30

30

9

30%

$14,199

$1,450

$150

$15,799

The results show that the goods that were found to be misclassified were properly re-classified elsewhere under Chapter 16 or within Chapters 2, 19, 20 and 21 of the Customs Tariff.

Live Plants

The risk identified is that live plants could be incorrectly classified under a duty-free tariff item within Heading 16.02, instead of being properly classified elsewhere within the same heading and potentially be subject to a duty rate of 6%.

This verification priority was released in May 2016 and is now complete.

Targeted Companies

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

10

10

3

30%

$1,656

$2,481

$150

$4,287

The results show that the majority of the goods were correctly classified.

Interchangeable Tools

The risk identified is that imported goods could be incorrectly classified as interchangeable tools within Heading 82.07, instead of being properly classified under various tariff items within different Chapters (for example, Chapters 39, 68, 82 and 84) and be subject to duty rates up to 6.5%.

This verification priority was released in May 2016 and is now complete.

Targeted Companies

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

20

20

11

55%

$38,847

$26,310

$17,850

$83,007

The results show that the goods that were found to be misclassified were properly re-classified elsewhere under Chapter 82 or within Chapters 73, 83, 84, 85 and 90 of the Customs Tariff.

Air Brakes and Parts Thereof

The risk identified is that imported goods could be incorrectly classified as air brakes and parts thereof, within Subheading 8607.21, instead of being properly classified elsewhere within Heading 86.07, and be subject to duty rates up to 10%.

This verification priority was released in May 2016 and is now complete.

Targeted Companies

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

16

16

13

81%

$69,464

$265,156

$3,750

$338,370

The results show that the goods that were found to be misclassified were properly re-classified elsewhere within Heading 86.07 or under Chapters 40, 73, 84, 85 and 90 of the Customs Tariff.

Sausages and Similar Products

The risk identified is that imported goods could be incorrectly classified as sausages and similar products under Heading 16.01, instead of being properly classified under a tariff rate quota (TRQ) tariff item, and be subject to duty rates of over 200%.

This verification priority was released in October 2016 and is now complete.

Targeted Companies

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

10

10

5

50%

$323,186

$1,375,201

$450

$1,698,837

The results show that the majority of the goods that were found to be misclassified were properly re-classified under various tariff items - including TRQ tariff items - within Heading 16.01 of the Customs Tariff.

Yeasts and Other Micro-Organisms

The risk identified is that imported goods could be incorrectly classified as yeasts under Heading 21.02, whereas the goods could potentially be properly classified elsewhere within Heading 21.02, and be subject to a duty rate of 6%.

This verification priority was released in January 2017 and is now complete.

Targeted Companies

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

11

11

5

45%

$48,969

$192,973

$150

$242,092

The results show that most of the goods that were found to be misclassified were properly re-classified elsewhere within Chapter 21 of the Customs Tariff.

Bicycle Parts

The risk identified is that bicycle related goods could be incorrectly classified within Heading 87.14, instead of being properly classified elsewhere within the same Chapter, and potentially be subject to various duty rates up to 13%.

This verification priority was released in April 2015 and is now complete.

A second round of verifications was released in October 2016 and is also complete.

Targeted Companies (Round 1-2)

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

104

104

96

92%

$217,707

$657,406

$127,375

$1,002,488

The results of both rounds show that the goods that were found to be misclassified were properly re-classified under many different Chapters, such as 40, 62, 73, 85, 87, 90 and many more, of the Customs Tariff.

Chemical Products

The risk identified is that there may be misclassification due to the significant duty difference for insecticides, fungicides, herbicides, etc., of Heading 38.08, depending on weight and package size of the imported product:

3808.XX.10: In packages of a gross weight not exceeding 1.36 kg each (6.5% duty rate);

3808.XX.20: In bulk or in packages of a gross weight exceeding 1.36 kg each (duty-free).

This verification priority was released in May 2013 and is now complete.

A second round of verifications was released in September 2015, and a third round in April 2017, and they are also complete.

Targeted Companies (Round 1-2-3)

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

94

94

53

56%

$148,467

$392,329

$20,550

$561,346

The results of the three rounds show that the goods that were found to be misclassified were properly reclassified under tariff item 3808.XX.10, “in packages of a gross weight not exceeding 1.36 kg each”.

Handkerchiefs, Towels and Related Paper Products

The risk identified is that imported goods could be incorrectly classified as handkerchiefs, towels and other related paper products within Heading 48.18, instead of being properly classified under various tariff items within different Chapters (for example, Chapters 30, 33, 34, 39, 56 and 96) and be subject to duty rates up to 12%.

This verification priority was released in May 2016 and is now complete.

Targeted Companies

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

30

30

17

57%

$30,287

$146,681

$13,275

$190,243

The results show that the goods that were found to be misclassified were properly re-classified elsewhere within Chapter 48 or under Chapter 34 of the Customs Tariff.

Photographic Film

The risk identified is that imported goods could be incorrectly classified as photographic film under Heading 37.02, instead of being properly classified under Chapter 96, and be subject to a duty rate of 8.5%.

This verification priority was released in October 2016 and is now complete.

Targeted Companies

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

13

13

8

62%

$7,520

$30,170

$27,000

$64,690

The results show that the goods that were found to be misclassified were properly re-classified elsewhere under Chapter 37 or within Chapter 96 of the Customs Tariff.

Railway Equipment

The risk identified is that imported goods could be incorrectly classified as railway equipment under Heading 86.08, instead of being properly classified under various tariff items, and be subject to duty rates up to 6.5%.

This verification priority was released in October 2016 and is now complete.

Targeted Companies

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

17

17

14

82%

$27,528

$29,656

$6,450

$63,634

The results show that most of the goods that were found to be misclassified were properly re-classified under various tariff items within Chapter 85 of the
Customs Tariff.

Sacks and Bags under Tariff Item 9903.00.00

The risk identified is that sacks and bags classified under various tariff items and accounted for under conditional relief tariff item 9903.00.00, which is duty-free, may not comply with the usage conditions set out in this tariff item. The applicable duty rates range from 3% to 18%.

This verification priority was released in July 2014 and is now complete.

A second round of verifications was released in October 2016 and is also complete.

Targeted Companies (Round 1-2)

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

16

16

8

50%

$147,370

$569,206

$11,700

$728,276

The results of both rounds show that some of the goods verified did not qualify for the use of conditional relief tariff item 9903.00.00.

Pebbles, Limestone and Granules

The risk identified is that imported goods could be incorrectly classified as pebbles, limestone and granules within Heading 25.17, instead of being properly classified within Heading 68.02, and potentially be subject to a duty rate of 6.5%.

This verification priority was released in July 2017 and is now complete.

Targeted Companies

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

14

14

9

64%

$9,382

$29,437

$7,950

$46,769

The results show that most of the goods that were found to be misclassified were properly re-classified within Chapter 68 of the Customs Tariff.

Curling Irons

The risk identified is that goods may be misclassified as curling irons, which are duty-free. However, similar goods, such as flat irons, are properly classified under tariff item 8516.32.90, which attracts a duty rate of 6.5%.

This verification priority was released in June 2012 and is now complete.

A second round of verifications was released in February 2014 and is also complete.

A third round of verifications was released in October 2016 and is also complete.

Targeted Companies (Round 1-2-3)

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

68

68

44

65%

$142,749

$400,699

$56,575

$600,023

The results of the first three rounds show that most of the goods that were found to be misclassified were properly re-classified under tariff item 8516.32.90.

Seaweed

The risk identified is that prepared seaweed, which attracts a duty rate of 6%, could be misclassified under Heading 12.12 as unprepared seaweed, which is duty-free.

This verification priority was released in September 2011, and is now complete.

A second round of verifications was released in May 2013, and is also complete.

A third round of verifications was released in March 2016, and is also complete.

A fourth round of verifications was released in April 2017 and is also complete.

Targeted Companies (Round 1-2-3-4)

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

94

94

78

83%

$258,703

$650,182

$35,325

$944,210

The results of the first four rounds show that most of the goods that were found to be misclassified were properly re-classified under classification number 2008.99.90.99 of the Customs Tariff.

Dextrins and Other Modified Starches

The risk identified is that goods could be incorrectly classified as “dextrins and other modified starches”, whereas they could be properly classified as “other sugars” of Heading 17.02. The duty rates under Heading 17.02 range from 0% to 11%.

This verification priority was released in March 2012 and is now complete.

A second round of verifications was released in May 2013 and is also complete.

A third round of verifications was released in June 2015 and is also complete.

A fourth round of verifications was released in January 2017 and is also complete.

Targeted Companies (Round 1-2-3-4)

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

92

92

64

70%

$298,221

$900,974

$61,300

$1,260,495

The results of the first four rounds show that the goods that were found to be misclassified were properly re-classified under Headings 17.02, 21.06, 35.05 and 38.24 of the Customs Tariff.

Hair Extensions

The risk identified is that hair extensions could be misclassified under Heading 67.03, which is duty-free, instead of being properly classified under Heading 67.04 (e.g., wigs, false beards, etc.), which attracts a duty rate of 15.5%.

This verification priority was released in March 2014 and is now complete.

A second round of verifications was released in November 2015 and is also complete.

A third round of verifications was released in January 2017 and is also complete.

Targeted Companies (Round 1-2-3)

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

60

60

53

88%

$570,762

$1,605,366

$45,100

$2,221,228

The results of the first three rounds show that the goods that were found to be misclassified were properly re-classified under Heading 67.04 of the Customs Tariff.

Parts for Power Trains

The risk identified is that goods could be incorrectly classified within Heading 87.08, instead of being properly classified under tariff item 8708.99.15 (parts for power trains for the vehicles of Heading 87.03), which attracts a duty rate of 6%.

This verification priority was released in August 2014 and is now complete.

A second round of verifications was released in August 2016 and is also complete.

Targeted Companies (Round 1-2)

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

18

18

16

89%

$3,472

$85,506

$6,450

$95,428

The results of the first two rounds show that most of the goods that were found to be misclassified were properly re-classified under various tariff items within Heading 87.08 of the Customs Tariff.

Tubes, Pipes and Hoses

The risk identified is that tubes, pipes and hoses could be incorrectly classified within Heading 39.17, instead of being properly classified elsewhere within the same Heading, and potentially be subject to a duty rate of 6.5%.

This verification priority was released in September 2015, and is now complete.

A second round of verifications was released in October 2017 and is also complete.

Targeted Companies (Round 1-2)

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

35

35

29

83%

$48,923

$391,073

$12,350

$452,346

The results of the first two rounds show that most of the goods that were found to be misclassified were properly re-classified elsewhere within Heading 39.17 of the Customs Tariff.

Hair Dryers and Electric Smoothing Irons

The risk identified is that imported goods could be incorrectly classified as hair dryers or smoothing irons within Heading 85.16, instead of being properly classified elsewhere within the same Heading, and potentially be subject to a duty rate of 6.5%.

This verification priority was released in November 2015 and is now complete.

Targeted Companies (Round 1)

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

35

35

16

46%

$27,457

$63,045

$2,700

$93,202

The results show that most of the goods that were found to be misclassified were properly re-classified elsewhere within Heading 85.16 of the Customs Tariff.

Stone Blocks and Slabs

The risk identified is that imported goods could be incorrectly classified as stone blocks and slabs under Headings 25.14, 25.15 and 25.16, which are all duty free, instead of being properly classified under various tariff items within Chapter 68, and be subject to duty rates up to 7%.

This verification priority was released in October 2016 and is now complete.

A second round of verifications was released in December 2017 and is also complete.

Targeted Companies (Round 1-2)

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

59

59

54

92%

$148,880

$410,147

$15,750

$574,777

The results of the first two rounds show that the majority of the goods that were found to be misclassified were properly re-classified under Chapter 68 of the
Customs Tariff.

Nails and Similar Articles of Iron or Steel

The risk identified is that imported goods could be incorrectly classified as nails and similar articles of iron or steel under Heading 73.17, which is duty free, whereas the goods could potentially be properly classified under dutiable tariff items, such as 8305.20.00 (staples in strips), and be subject to a duty rate of 6.5%.

This verification priority was released in January 2017 and is now complete.

Targeted Companies (Round 1)

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

39

39

14

36%

$46,101

$111,925

$600

$158,626

The results show that most of the goods that were found to be misclassified were properly re-classified under tariff item 8305.20.00 of the Customs Tariff.

Mineral Waters and Aerated Waters

The risk identified is that imported goods could be incorrectly classified as mineral waters and aerated waters within Heading 22.01, instead of being properly classified elsewhere within the same Chapter, and potentially be subject to a duty rate up to 11%.

This verification priority was released in July 2017 and is now complete.

Targeted Companies (Round 1)

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

10

10

7

70%

$5,844

$43,119

$600

$49,563

The results show that most of the goods that were found to be misclassified were properly re-classified under tariff item 2201.90.00 of the Customs Tariff.

Mountings, Fittings, and Similar Articles

The risk identified is that imported goods could be incorrectly classified as mountings, fittings and similar articles within Heading 83.02, instead of being properly classified under various tariff items within different Chapters (for example, Chapters 73, 83, 84, 87 and 94), and potentially be subject to duty rates up to 8%.

This verification priority was released in January 2016 and is now complete.

Targeted Companies (Round 1)

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

41

41

29

71%

$19,523

$225,788

$15,000

$260,311

The results show that the goods that were found to be misclassified were properly re-classified under various tariff items within Chapters 39, 73, 82, 83, 84, 85, 87, 94 and 98 of the Customs Tariff.

Valuation:

Fresh Cut Flowers

The risk identified is that aside from the potential misclassification of fresh cut flowers, there is also a risk of undervaluation of the goods.

Companies were selected for both valuation and tariff classification trade compliance verifications.

This verification priority was released in April 2012 and is now complete.

Targeted Companies

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

30

30

23

77%

$119,183

$508,915

$18,000

$646,098

The results show that many goods were found to be valued incorrectly (e.g., transportation costs were not added to the price paid or payable).

Yachts for Pleasure or Sport

The risk identified is that importers of yachts and pleasure crafts may not be in compliance with the valuation provisions of the Customs Act. The industry has been selected given the high rates of duty associated with Heading 89.03. Tariff items under this heading are dutiable with the exception of tariff item 8903.99.10 (racing shells), which is duty-free.

This verification priority was released in March 2012 and is now complete.

Targeted Companies

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

10

10

3

30%

$5,171

$3,460

$450

$9,081

The results show that some goods were found to be valued incorrectly (e.g., service fees were not added to the price paid or payable).

Preparations and Pastrycooks’ Products

Given the rates of duty associated with preparations of cereals, flour, starch, milk, and pastrycooks’ products, this industry was selected for verification. The products are generally classified under Chapter 19 and the majority of the Harmonized System numbers are dutiable, while others are subject to Tariff Rate Quotas.

This verification priority was released in June 2012 and is now complete.

Targeted Companies

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

9

9

5

56%

$116,454

$1,023,919

$2,400

$1,142,773

The results show that many goods were found to be valued incorrectly (e.g., packaging and transportation costs were not added to the price paid or payable).

Origin:

Mattress Upholstery

This verification priority was initiated following an industry complaint about exports of mattress casings from the USA to Canadian mattress manufacturers, claiming the provisions of NAFTA, when textile material may have been sourced from outside NAFTA territories.

This verification priority was released in April 2012 and is now complete.

Targeted Companies

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

18

18

8

44%

$64,453

$115,342

$25,900

$205,695

The results show that some goods did not qualify under NAFTA.

Cotton Pants

Previous verifications indicated that there was evidence that men's or boy's cotton pants of subheading 6203.42 frequently failed challenges to their entitlement as originating goods under the NAFTA tariff treatments due to the fabric-forward requirement of the specific rule of origin governing the goods.

This verification priority was released in May 2012 and is now complete.

Targeted Companies

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

13

13

1

8%

$653,389

$0

$0

$653,389

The results indicated that most of the verified goods qualified under NAFTA.

Jewelry

The risk identified is that jewelry classified in Chapter 71 may not meet the specific rule of origin and therefore does not qualify for duty-free importation under NAFTA.

This verification priority was released in March 2014 and is now complete.

Targeted Companies

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

9

9

3

33%

$0

$167,684

$4,500

$172,184

The results show that some goods classified as jewelry do not qualify under NAFTA.

T-Shirts

Previous verifications indicated that there was evidence that t-shirts of Heading 61.09 were not compliant with the NAFTA Rules of Origin for several reasons.

This verification priority was released in June 2013 and is now complete.

A second round of verifications was released in June 2016 and is also complete.

Targeted Companies (Round 1-2)

Cases Closed

Cases in Error

% Non-Compliance

DAS Issued ($)

Self-Adjustments by Importers ($)

Penalties ($)

Total ($)

84

84

40

48%

$657,514

$2,127,921

$64,650

$2,850,085

The results of the first two rounds show that some goods classified as t-shirts do not qualify under NAFTA.